This invention relates generally to the electronic handling of financial instruments and more particularly, but not by way of limitation, to the optical imaging and digital processing of tangible bank checks. Within these contexts, the present invention provides a real time financial instrument image exchange system and method by which financial instrument images and data can be exchanged during or after the capture process.
The banking industry has two long-standing goals: check truncation and quick return notification. In a typical check handling process, a bank customer gives a tangible bank check to his or her bank to make a deposit, for example. The check is frequently from another person having his or her account at a different bank, and so to process the check it is eventually packaged with other checks drawn on the same bank and sent to that bank. This involves significant manual handling of the various checks, transportation costs, and time. Check truncation would reduce or eliminate these because with check truncation the bank where checks are first deposited would hold the tangible items for some specified time and then likely destroy them. Should someone later need a destroyed check, however, some record of the check must be retained.
When a check deposited with one bank (the bank of first deposit, or the depositing bank) is drawn on the account of a customer at another bank (the payor bank), whereby the aforementioned check bundling and transporting occur, the depositing bank does not immediately know whether there is some problem with the check it has just received (for example, insufficient funds in the payor bank's customer's account) because of the time it takes the check to be processed and acknowledged by the payor bank. If the check is not to be honored by the payor bank, the payor bank sends a return notice to the depositing bank; however, this may not be for two days or so using the aforementioned manual processing. To avoid a potential financial loss, the depositing bank would prefer not to credit its customer's account until it knows that the check is good; however, in view of the time involved, this may not be practical because of client relations or because of banking regulations requiring some action by the depositing bank before the deposited check can be fully processed through the payor bank. As a result, banks suffer losses because of bad checks.
Attempts have been made to meet these goals of truncation and of early notification that a check is not going to be honored by a payor bank. These attempts include concepts known in the banking industry as electronic data interchange, image processing, and electronic check presentment. Although these prior efforts may provide benefits, we are not aware of a present commercially functional real time financial instrument image exchange system and method as provided by the present invention.